1. What is CPP and EI?

CPP (Canada Pension Plan) and EI (Employment Insurance) are mandatory contributions deducted from employment income in Canada. CPP provides retirement, disability and survivor benefits, while EI provides temporary income support to unemployed workers.

2. How Does the Calculator Work?

The calculator uses standard contribution rates:

Where:

• Earnings — Gross employment income ($)
• 5.95% — Current CPP contribution rate
• 1.66% — Current EI premium rate

Example: For $50,000 earnings: CPP = $50,000 × 5.95% = $2,975; EI = $50,000 × 1.66% = $830

3. Importance of CPP and EI Calculation

Details: Accurate calculation of CPP and EI contributions is essential for proper payroll processing, tax compliance, and ensuring employees receive appropriate benefits when needed.

4. Using the Calculator

Tips: Enter your gross employment earnings in Canadian dollars. The calculator will automatically compute both CPP and EI contributions based on current rates.

5. Frequently Asked Questions (FAQ)

Q1: Are there maximum contribution limits for CPP and EI?
A: Yes, both CPP and EI have annual maximum contribution amounts that change yearly based on maximum pensionable earnings and maximum insurable earnings.

Q2: Who pays CPP and EI contributions?
A: Both employees and employers contribute to CPP and EI, though employers pay a higher EI rate than employees.

Q3: Are self-employed individuals required to pay CPP and EI?
A: Self-employed individuals must pay both the employee and employer portions of CPP but are not required to pay EI premiums.

Q4: When are CPP and EI contributions deducted?
A: Contributions are deducted from each paycheck throughout the year until maximum contribution limits are reached.

Q5: How often do contribution rates change?
A: Contribution rates are reviewed annually and may change based on economic factors and program requirements.